Come and look at my knives!

John Batten explores how consistent diagnostic success starts long before a technician sees the car

Published: 14 October, 2017

Our industry is full of enthusiastic technicians and entrepreneurial business owners; people who love what they do, and their chosen trade.

With all this talent why is it that similar questions prevail year-on-year? Customers constantly ask "how much, and can’t you just plug it in?" Business owners ask "why don’t customers want to pay for diagnosis?" Technicians ask "how can I diagnose this fault when I’ve not been given enough time?"

Individually these are all reasonable questions from the viewpoint of person asking, but really annoying if you’re the party being asked. Is it possible to crack this enigma? I would like to believe so.

In this article we will show you how to grow profit, give your technicians the time they need to succeed and always do the right thing by your customer.

Knives outWe should not be surprised that customers want to find out how much it's going to cost. After all, it's an obvious question. Just because a customer asks "how much?" does not mean they are only focused on the lowest possible price. If you walked into a Gordon Ramsey restaurant and there were no prices on the menu you'd still ask "how much?" You wouldn't expect the answer to be McDonalds prices. This is where as an industry we don't always help ourselves.

Customers will build an impression of your business quickly, and whether they’ll consider using your services during their very first experience, which more often than not starts online.

Back to Gordon Ramsey then. You Google (other search engines are available) ‘Gordon Ramsey restaurant’ and are presented with a list in the search results. Naturally you start from the top, you click, and the page loads. You’re met with a surprising image. Rather than a picture of the restaurant, and amazing dining experience, you're presented with a chef in his whites with the caption, “come and look at my knives; we’ve got the best knives in town.” The text beneath this states “we have the latest oven technology!” As a customer I’m not sure that’s what I expected to see. Peculiarly though, other restaurants are putting the same message out there and it’s colouring my view of what I need for a great steak.

With this in mind, we shouldn’t be surprised if a business proclaiming “we have the latest diagnostic equipment,” causes customers to think it is the kit that fixes the car. Maybe that’s why they then ask “can’t you just plug it in?” Could it be that our own websites are a contributing factor as to why diagnostics is a difficult sell?

Don’t just take the keys: Ask great questionsSo you arrive for your meal at Ramsey's restaurant. The Maître d' confirms your reservation, takes your coat and sees you to your table. Unfortunately the menu is written in French (damn - should have concentrated more at school) and you're feeling uneasy about what to order. At this point, great front-of-house staff will put you at your ease, and ask the relevant questions to help identify the ideal menu choice for you. Garages are no different. Front-of-house staff have a pivotal role to play particularly where ‘diagnostic’ repairs are concerned. They have to put customers at ease, outline their options and ask great questions.

Enter Steve… The battleground on this occasion was a 2011 Skoda Yeti that would intermittently lack power and ultimately cut out. The client explained that it had been inspected previously, but he’d been told by the repairer “it hasn’t happened to us” and no fault was found. Intermittent faults: Our favourite type.

SleuthingSteve asked if the customer could spend five minutes to take him through how, what and when the issue occurred. Five minutes spent here often means a reduction in diagnostic time and a reduced cost to the customer. Naturally the client was only too happy to oblige.

The client explained his issue and Steve listened diligently, noting the salient points on the job card. He found the fault normally happened on longer journeys. Further questioning revealed that it was predominantly on the weekend. Steve asked “what’s different on the weekend”?

Now, this was the killer question. It transpired that the client was an avid football fan and would regularly travel to away games, collecting his pals on the way. Steve’s next question closed the door on his sleuthing. “Is it only when you have passengers in the back seat?”

“Yes,” came the reply.

Happy TechsWhat a great job card for the tech to receive. In this instance the tech removed the rear squab to reveal a chafed fuel pump harness, which was duly repaired and routed to ensure the fault didn’t re-occur.

Post-fix processes confirmed that the car wouldn’t be back anytime soon and the keys and job card passed back to reception. A straightforward fix but one that could have remained elusive was it not for “diagnostics at the front desk”.

Easy? No. Achievable? Yes. It’s often possible to resist change even though we understand why it’s necessary and the benefits change will bring. If you have been doing it the same way all these years, a new approach could seem difficult. The task can often seem too big. However, small constant steps are all that is required:

Focus on crafting a consistent customer message that delivers on your unique benefits and the skill of the technician

Have a realistic evaluation fee that allows your tech the time required to succeed and a front-of-house team that can show the customer how this benefits them

Add great front-of-house questioning skills to unearth the hidden gems only known to your customer, which will help your techs and reduce the time taken for diagnosis

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ACtronics are the leading electronic automotive component remanufacturers based in Colchester, Essex. They are able to remanufacturer units such as ECUs, ABS ECUs, instrument clusters, throttle bodies, displays and TCUs and offer a two-year warranty on all remanufactures.

Workshop owners need to think hard about investment decisions. With that in mind, I’ve used my last two articles to look at a business management tool called value proposition design, which can help us to work out where to spend our cash.

We saw that it involves understanding our customers’ needs, which we do by identifying the jobs they want to achieve, and the positive and negative factors associated with them, respectively known as gains and pains. We then looked at how a business can identify products and services that might help customers complete their jobs, which, in turn, will either create the customers’ desired gains or relieve their undesired pains. These gain creators and pain relievers provide benefit to customers. Thus, investments in the right products and services increase our value proposition.

Our investment decisions are usually complicated by the fact that they can represent a chicken-and-egg situation: Money is needed to support the creation and delivery of products and services, yet profitable products and services are needed to create money (at the very least you will need to show that you will have good profitability if you are borrowing to fund your investment). As such, there are two measures of success of our value proposition: Whether it provides real value to our customers and whether it can be deliverable within a sustainable business model.

This article introduces a concept known as fit, which is the extent to which a company’s offerings match the needs of its target customers and are delivered within a sustainable business. Fit, therefore, represents the yardstick by which the success of a value proposition is assessed.

There are three levels of fit of a value proposition to a customer (segment) profile:

Problem-solution (‘on paper’)If we take the value proposition discussed in my last article and check it against the customer segment profile created in the preceding article, we can check their fit. We do this by going through the pain relievers and gain creators one by one and checking to see whether they match a customer job, pain or gain. We can physically visualise this degree of fit by putting a check mark on each one that does (see Figure 1).

In this example, we have used our experience to the identify some jobs, pains and gains that customers might care about, and then created a value proposition to try to address them. However, at this point, we do not have any material evidence of the potential success of these products and services, gain creators or pain relievers. I.e. the fit is only evident on paper. The next step is to find evidence that customers care about the value proposition, or to start over designing a new one, if it is found that the customers don’t care.

Product-market (‘in the market’)Once your products and services have been made available to customers, you will soon see whether they provide value to your customers and gain traction in the market place: customers are the ultimate, most ruthless, judge and jury of your products and services.

When assessing product-market fit, it is important to check and double-check the assumptions underlying your value proposition, i.e. have you correctly identified and prioritised the relative importance of the customer’s jobs, pains and gains? Have you provided things that customers don’t care about, and will you have to amend your value propositions, or start again?

Business model (‘in the bank’)Your business model is the way your business is geared up to generate revenue and burn cash whilst you are creating and delivering a value proposition to your customers.

The search for business model fit involves reaching a state where you have a value proposition that creates value for customers (products and services they want) and a business model that creates value (profit) for your organisation. You don’t have business model fit until you can sustainably generate more revenues with your value proposition than you incur costs to create and deliver it.

ContextThe potential value of our products and services, and the associated gain creators and pain relievers, doesn’t just depend on their match to the customer’s jobs, pains and gains. It also depends on the circumstances in which they are offered; i.e. their value is dependent on context.

For vehicle owners, an example might be the value of breakdown services. Have you ever signed-up for these from the hard-shoulder of a motorway? You’ll notice that you don’t get much of a discount. Those offers that you might have seen on the internet beforehand will suddenly seem pretty good value. These differences are because the breakdown service companies know full well that the perceived value of their services depends on context!

As such, businesses must identify the contexts in which their products and services will be offered. For example, a customer’s priorities will differ depending on whether they are broken down, have an expired MOT, need a replacement bulb in night time driving conditions, or are just booked-in for scheduled servicing etc. It is possible that each context might require its own value proposition.

FocusFor a customer having a given set of jobs and associated pains and gains, there are many ways a business might design a value proposition to achieve a fit. This is certainly true in our industry, in which there are many competing types of service and repair provider. Each has tweaked its value proposition to suit a given type of vehicle owner or context:

Independent workshops, often offering a large range of products and services as a kind of one-stop-shop to the ‘general’ motorist, usually aim to generate sufficiently high revenues by inspiring maximum loyalty from customers and trying to meet all their needs under one roof. These businesses require constant investment to provide the services necessary to keep-up-to-date with changes in motor vehicle technology and face a continuous challenge to monetise the value of every additional service. Many diagnostic (or recalibration) services are still not well understood by customers, and workshops have to work hard to educate them, so that they can ‘appreciate’ their value. Convenience must also play a relatively significant part in their value proposition.

Fast-fit operations are all about convenience: Their customers can get in and out fast, without any notice, and, hopefully, with the minimum of disruption to their lives. The businesses require large stock inventories to ensure that there are no supply-related delays. By concentrating on only the fast-moving (the most commonly needed) products, these businesses can remain highly scalable and profitable: although they limit the scope of their products and services, to reduce costs, their sales volumes allow them to retain considerable buying power. Their customers love the convenience and prices they can offer given the buying power (and increasing integration with the parts supply chain) that the larger fast-fit chains have. Main dealers, I think, rely more on social or emotional pains and gains to draw in their customers (e.g. think about the image they work hard on purveying or the potential manipulation of customer perceptions of safety, both driven by presenting themselves as the most qualified to work on a given make of vehicle). They need to work hard to offer convenience (e.g. courtesy cars, rapid turn-around, customer/vehicle pick-up or drop-off etc.) as their dealerships, geographically-speaking, are relatively sparsely distributed amongst the population. Some vehicle owners (ironically, those most likely to buy their next vehicle from a dealership) will also be concerned with the resale value of their car and may seek to maintain a full dealer service history to try to maximise its value.

Following the above, broadly-defined, categories of businesses, there comes specialists, offering a smaller range of products and services to increasingly niche customer segments or contexts: e.g. independent specialists (single-make specialists combining aspects of both the independent workshop and main-dealer value propositions), diagnostic specialists (as with breakdown and recovery specialists, when you need them, you need them – and they should charge accordingly), component-repair specialists (e.g. transmission specialists).

Then there is the remaining plethora of value propositions available to vehicle owners: breakdown and recovery services (apart from their normal role helping those in distress, I’m sure they would agree that they also play a role in repairing vehicles for those that place no value whatsoever on preventative maintenance…); mobile technicians (perhaps offering the ultimate in convenience in certain contexts?); and, my favourite, the chancers (that bloke in the pub who once changed a side-light and now thinks he can charge an equally stupid idiot to fit a new timing chain for them…).

FutureWe’ve seen from the above that a stack of value propositions is competing for our vehicle-owning customers. As such, our value proposition design work and derived knowledge, can inform a strengths, weaknesses, opportunities and threats (SWOT) analysis of our business. So far, all these competing businesses have managed to co-exist and thrive within an industry that is set-up to offer value to private vehicle owners. However, take a look at Figure 1 again – what might be arriving in the future that could represent a threat to not only an independent workshop but the entire sector? How about Vehicle-as-a-Service (VaaS), a.k.a. car-on-demand? This single value proposition removes an awful lot of the hassle of vehicle ownership (equivalent to automotive morphine…) and provides many gains. In fact, it is so disruptive that it removes/changes the very nature of the customer segment; vehicle ownership becomes almost redundant. Should it be a surprise that one of the few barriers to widespread adoption of VaaS (the convenience of making short, necessary, journeys, e.g. to pick up milk when nearby shops are closed) is being addressed by a company that is seeking to provide VaaS: i.e. Amazon whom are also developing drone delivery systems?

When it comes to the ultimate value proposition, may be there can be only one.

If you had a little money, how would you spend it to improve your business? Maybe you’d buy the latest ADAS calibration kit, or subscribe to an workshop management system?

Okay, now let’s think bigger. If you were given all the money you had ever invested in your business and could start it again from scratch, how would you gear it up to attract customers and make it profitable? Would you build something like your current business, or would it be totally different?

Why do I ask? Because the world changes quickly, which means our businesses are rarely set up exactly as we need or want, and we must make frequent spending decisions. We must work out how to prioritise our spending, to ensure we always offer the things of greatest worth to our customers; i.e. we maximise our value proposition.

Last month, we sought to understand our typical customer (a private vehicle owner). We saw that they have functional, emotional and social tasks to complete (jobs). These jobs have either good results (gains), or bad outcomes, risks and obstacles, related to their undertaking or failure (pains). For example, taking a car to the workshop is an extreme pain for a typical customer because it makes it more difficult for them to complete their more important jobs (e.g. commute to work or navigate the school run).

This month, we’ll use the things we learned about our customers to design our value proposition; We’ll use a repeatable technique to ensure our businesses offer the things our customers need and want. The result will be a value (proposition) map, or value map for short.

Value mappingAnything that helps our customers get their jobs done will have value. Therefore, our products and services must aim to help them complete their jobs. If these products and services then eliminate a customer’s pains, they are pain relievers, or, if they produce gains, they become gain creators. By stating the ways in which our products and services create gains and relieve pains, we can communicate their potential benefit to our customers. Hence, by putting a list of our products and services together with the lists of their respective pain relievers and gain creators, we create a guide to the worth of our business to our customers. That is, we make a value map.

Of course, not all our products and services, and their subsequent pain relievers and gain creators, are equally relevant to our customers; some are essential, whilst others are merely nice to have. We can use these differences to help our decision making: by ranking the items in our value map in their order of relevance to our customer, we can see which can be ignored, and which can be prioritised.

Figure 1 shows example items that might be within an independent workshop’s value map, ranked in order of relevance to a private-vehicle-owning customer (a value map is targeted at a specific customer segment). As with the creation of a customer profile, there is no ‘right’ answer; this one is based on my half-thought-through assumptions, and previous business experiences. Yours might differ. Hence, we must derive and tweak our respective value maps accordingly. Ultimately, each of us would use business metrics (e.g. profit ratios and customer satisfaction ratings) to tune our value propositions to the max. But that’s a task for another time.

Products and servicesWe saw before that customers don’t like to waste time at a workshop; they want to go through their lives with the minimum of hassle. They crave convenience. Therefore, courtesy cars, a handy location (covered under ‘community-orientated’ services in Figure 1), extended opening-hours, while-you-wait servicing, or pick-up and returns (either vehicle or customer) all represent high value offerings. We don’t have to offer them all - they’re included in Figure 1 for reference. Likewise, online bookings and related management systems simplify engagement, bring convenience, and enhance value.

Have you ever heard a customer say they like messy and dirty workshops and technicians? I haven’t. That’s because we attach value to our health and safety: If your premises and staff are well presented, they will project professionalism, and your customers will reach their desired emotional state of feeling safe. Even better, properly motivated, well-equipped and trained staff will increase the likelihood that your customers are safe and secure. As safety fears are powerful motivators and manipulators, we must use our expertise to help our customers assess and manage their exposure to risks. They will then be in control and feel in control of their safety.

Not all customers will be seeking to cut costs all the time, but certainly all of them will want to control their costs. There are ways a business can help customers manage this aspect of their lives: clear terms of trade and fee structures; well-managed engagements with expert advice; warranted parts and labour; and a range of payment methods such as easy-pay solutions, touch-less, or credit card services.

Surprisingly, some customers want to look after their vehicles. Primarily, this helps them feel safe and secure, minimises the risk of disruption to their lives (from breakdowns), and protects the value of their vehicles. A good service history represents monetary value in this sense. This means we should be offering, high quality parts and labour, and OE-aligned servicing and repairs.

Pain relieversIt might suit your ego to think all your customers visit your workshop because of your skill, expertise and professionalism, or your friendly welcome and great (i.e. free) coffee. However, pure convenience can be the decisive factor when some customers choose where to take their vehicles: you’re around the corner; you had a spare courtesy car; you’re open; you were prepared to look at it there and then; you had the part in stock etc. Whilst this reflects the significant value these pain relievers offer to all our customers, it is the case that some of those who value convenience above all else are not able to see the worth of your other products and services. If they don’t understand that your conveniences come at a cost, then point them elsewhere. You will never please them. Nothing has the potential to sour a relationship like an unexpected bill: When my head was buried in an absorbing diagnostic job, adequate communication was sometimes an issue for me. My ‘solution’ was to swallow the costs, to avoid upsetting the customer. This was neither a solution nor a sustainable business strategy. What I really needed was the best preventative medicine of all: Great communication.

It should be no surprise that there are far more pains than gains in our value map: Servicing and repair workshops are all about pain relief; we are either trying to eliminate a current pain, through diagnostics and repairs, or carrying out preventative maintenance to avoid a future pain. Because this is our reason for being, customers find it intolerable to think our actions have caused them unnecessary inconvenience or costs. Nowhere is this more obvious than when we try to ‘help them out’ - Every time we ever tried to help a customer to control costs (i.e cut costs), by fitting a cheaper part or trying a less expensive solution, it always backfired. Every single time. Can you guess who suffered the consequences? It always paid us better to ensure the car was fixed when it left the workshop. ‘Try it and see’ tends to translate into ‘you are going to be really cheesed off next time I see you’, It also counted that we supplied quality, parts and labour.

Gain creatorsWhen properly delivered, our products and services will help our customers have the following: An easy-life; a car that holds its value and works properly; peace of mind; a sense of feeling special at our premises; and the information from our sound advice to make good decisions.

However, for some of us, the ultimate convenience is to not have to engage our brain, so if we really want to take our value proposition to the next level, we must be highly proactive and perform our customers’ thinking for them: e.g. by sending MOT and service reminders, with easy to process ‘calls to action’ so that they are only a click away from being sorted. Then, at the allocated time, we would pick-up their vehicles from their homes to take them to the workshop, leaving a replacement vehicle in their place. I know plenty of businesses that do this. And they are successful.

Money, money, moneyThere are many servicing and repair options available to private vehicles owners: Independent workshops, fast-fit chains, main-dealer workshops, mobile technicians, chancers, etc. Next time we’ll see how other business types deliberately tweak their offerings (value maps) to fit specific customer segments. We need to learn to be equally deliberate and well-informed about our investment decisions. What if we don’t? Well, we might waste all our money, and lose all our customers. Which isn’t always funny, even in a rich man’s world.

Launch UK has been awarded the “Best Launch Business 2017” accolade by the brand’s European division.The award is in recognition of its customer service and its commitment to supporting customers in all areas of business.

Life is always changing and as we all get older we start to remember our younger days and reminisce about how ‘things ain’t what they used to be.’

For example, a century ago, horses were still an everyday mode of transport and every village had a blacksmith to re-shoe them. As time moved on, getting to work was done on foot, by bus or by bike – which if you were lucky, may have had an engine. To service these two wheeled modes of transport, every village had a cycle shop who often covered both pedal and motorcycle versions. As the UK economy developed, many people aspired to owning a car for improved mobility. I recall how difficult it was for my father being able to afford to buy the family’s first car. It may have had leather seats, but there was no heater, so journeys in the winter were no fun. My father also conducted most of his own maintenance, as did many other vehicle owners, but this gradually started to be provided by the local garage and the aftermarket as we know it today was developed.

EvolutionFor the last four or five decades, although the aftermarket has evolved, the basic business models have not fundamentally changed. People and businesses acquire vehicles and these vehicles get serviced and maintained by the main dealer or the independent workshop. Competitive choices exist for locations, labour rates and the spare parts. As vehicles have become more sophisticated with the introduction of electronically controlled systems, the ability to access the technical information needed to diagnose, service or repair the vehicle has become ever-more critical and legislation has been needed to ensure that competitive choices can still be offered.

To be able to repair today’s vehicles has therefore been about the appropriate training and equipment, supported by local marketing to attract vehicle owners into your workshop. This is relatively straightforward and more of an education process than a revolution of the basic business model – but this is starting to change.

The future is being seen as ‘mobility’ and ‘mobility services’ and the way that this is developing will fundamentally impact the Aftermarket as we know it today.

There are a number of key reasons why the future will impose a change to today’s business models. The types of motive power are already evolving and this rate of change will increase. This in itself will change the type and volume of work that traditionally has been provided to vehicle owners. Vehicles may still have an internal combustion engine, but this will be part of a hybrid system, which is more likely to be petrol than diesel – but it will include some form of electric motor – either as a direct drive unit, or as a 48 volt ‘mild hybrid’, but in both cases with energy recovery functions that reduce the amount of braking and consequently the replacement of brake system components. This situation is further increased if the vehicle is fully electric, when there are far fewer service and maintenance requirements. However, these vehicle types will only create an evolution of today’s business models.

RevolutionThe revolution comes when you consider the change of vehicle ownership that is increasingly happening and the rate of which it will increase. The ‘good old days’ of aspiring to own a vehicle is no longer the case for the younger generation and a whole new range of ‘mobility services’ are being developed – especially as fully autonomous vehicles are introduced in volume. In many cases this means that the vehicle owner changes from being an individual to become a corporate organisation or even remains the vehicle manufacturer themselves.

This fundamentally changes the way that servicing and repairing the vehicle will take place. Firstly, the corporate owner of the vehicle will want to decide where and for how much their vehicles are being serviced and maintained. However, this may rapidly expand into a demand for lower hourly rates, together with a further demand of what parts are used. At best this creates a direct negative impact on your profitability, but it may go further.

Further requirementsThere may be a further requirement for specific levels of both technical and management competence, which may require specific standards and management processes to be verified and maintained – increasing costs whilst margins are squeezed. Corporate organisations may also expect a national contact and administration function, which as an individual independent workshop it will be impossible to provide, so now you may need to consider how to be part of a coordinated national group with centralised facilities to be able to be ‘part of the game’. However, on the plus side, as part of a larger group you may also be in a stronger position to negotiate with the larger vehicle operator organisations, so it may not be all bad news.

If the vehicle manufacturer remains the owner of the vehicle, then they may also require that you handle warranty work – at the lower warranty hourly rates, together with the specific contracts that the vehicle manufacturer will also expect to ensure that their ‘standards’ are maintained. Ultimately, as vehicle ownership models change and ‘mobility services’ become the norm, each element of your business is likely to be managed by the requirements of the corporate organisations. This is not a legislative issue, but a direct consequence of changes in mobility service models and their commercial impact.

Significant impactThe good news is that independent garages will still be needed, but the most significant impact will be the squeeze on your hourly rates and spare parts margins, in much the same way as insurance companies have controlled accident repair centres. Ultimately, this may also impact your ‘modus operandi’ by imposing technical, management and reporting requirements. This creates the simple question – you may still be the legal owner of your business, but in reality, who controls your actual day to day business – you or the mobility services vehicle owner?

Now may be the time to start thinking about joining forces with other independent workshops – probably as part of a national soft franchise or an association – otherwise it may be a case of united we stand or divided we fall.